Let’s End Surprise Medical Bills

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Surprise medical bills are costing consumers

Nearly one third of privately insured Americans have dealt with medical bill shock in the past two years

Published: May 08, 2015 10:30 AM

When it came time for Lisa N. of Santa Cruz, California, to have her baby, she checked in to her local in-network hospital, using her in-network OB/GYN and neonatologist. She hadn’t been planning on getting an epidural, but ended up needing one. Lisa, who has insurance, also hadn’t planned on the hefty price tag for that epidural. Everything—from the doctor and delivery, to the hospital room and nursing services—was covered under her insurance . . . except for the anesthesiologist who administered the epidural. Cost for the anesthesiologist: $3,000.

Lisa eventually found out that even though the anesthesiologist worked at the in-network hospital, this physician was considered out-of-network. Even worse, it turned out there were zero in-network anesthesiologists at that hospital.

Lisa’s experience is far from the exception. These types of surprise medical bills—where a consumers’ health plan paid less than expected—affected nearly one third of privately insured Americans in the past two years, according to a new national survey by the Consumer Reports National Research Center. And of the consumers hit with medical bill shock, almost one in four received a bill from a doctor they did not expect to get a bill from.

Our survey findings shine a light on some of the loopholes in the health insurance system that perpetuate medical bill shock and put consumers in the middle of a reimbursement battle between their insurance providers and out-of-network doctors, in what is referred to as "balance billing."

If you go to a hospital or doctor in your network, the unfortunate truth is that there is no guarantee that all your treatment will be billed as such. Avoiding these types of charges can be difficult during routine appointments and can be nearly impossible in emergency medical situations where consumers don’t have the luxury of stopping treatment to check that every doctor they’re seeing is in their plan’s network.

It’s clear that consumers also struggle with resolving these billing issues and don’t know who to turn to for help. Our survey found that more than half (53 percent) of those with surprise medical bills reported that the issue was either not resolved as they liked or not resolved at all, with a majority of this group (57 percent) ultimately paying the bill in full. More concerning is that they didn’t know about resources where they could turn to for help: An overwhelming majority (87 percent) did not know which agency or department in their state government is tasked with handling complaints about health insurance.

To help consumers who are hit with surprise medical bills, Consumers Union just launched a new online Insurance Complaint Tool. The tool provides state-specific assistance, resources, and information for consumers across the country. It’s not only important that consumers know who to contact, but state agencies insurance departments also need to know about the problems that consumers are facing.

But there’s also work than can be done to prevent these types of bills in the first place. Consumers Union, the policy and advocacy arm of Consumer Reports, believes the solution to surprise medical bills requires a combination of strong consumer protections and increased transparency. That’s why we’re currently working to pass legislation in several states, including California, Connecticut, New Jersey, and Texas, which would strengthen protections against surprise medical bills. We were also strong advocates of a new groundbreaking New York law that bans balance billing in emergency medical situations.

If you’ve ever fallen victim to out-of-network "gotchas" where you think you're covered but it turns out you now owe thousands, Consumers Union wants to hear from you. Click here to share your story and visit our Insurance Complaint Tool to find assistance in your state.

This feature is part of a regular series by Consumers Union, the policy and advocacy arm of Consumer Reports. The nonprofit organization advocates for product safety, financial reform, safer food, health reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.